Correlation Between Metals Exploration and Silvercorp Metals
Can any of the company-specific risk be diversified away by investing in both Metals Exploration and Silvercorp Metals at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Metals Exploration and Silvercorp Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metals Exploration Plc and Silvercorp Metals, you can compare the effects of market volatilities on Metals Exploration and Silvercorp Metals and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Metals Exploration with a short position of Silvercorp Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metals Exploration and Silvercorp Metals.
Diversification Opportunities for Metals Exploration and Silvercorp Metals
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Metals and Silvercorp is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Metals Exploration Plc and Silvercorp Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silvercorp Metals and Metals Exploration is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Metals Exploration Plc are associated (or correlated) with Silvercorp Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silvercorp Metals has no effect on the direction of Metals Exploration i.e., Metals Exploration and Silvercorp Metals go up and down completely randomly.
Pair Corralation between Metals Exploration and Silvercorp Metals
Assuming the 90 days trading horizon Metals Exploration Plc is expected to generate 1.24 times more return on investment than Silvercorp Metals. However, Metals Exploration is 1.24 times more volatile than Silvercorp Metals. It trades about 0.09 of its potential returns per unit of risk. Silvercorp Metals is currently generating about 0.02 per unit of risk. If you would invest 123.00 in Metals Exploration Plc on September 3, 2024 and sell it today you would earn a total of 397.00 from holding Metals Exploration Plc or generate 322.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 87.35% |
| Values | Daily Returns |
Metals Exploration Plc vs. Silvercorp Metals
Performance |
| Timeline |
| Metals Exploration Plc |
| Silvercorp Metals |
Metals Exploration and Silvercorp Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metals Exploration and Silvercorp Metals
The main advantage of trading using opposite Metals Exploration and Silvercorp Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metals Exploration position performs unexpectedly, Silvercorp Metals can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Silvercorp Metals will offset losses from the drop in Silvercorp Metals' long position.The idea behind Metals Exploration Plc and Silvercorp Metals pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Silvercorp Metals vs. British American Tobacco | Silvercorp Metals vs. International Biotechnology Trust | Silvercorp Metals vs. Futura Medical | Silvercorp Metals vs. Gamma Communications PLC |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |